Current and Future Approachesin the Communications Industry

John B. KochNCTIA 74th Annual Convention

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The Perfect Storm

Technology

Regulation

Competition

3

Handling the Perfect Storm

• LECs Have Several Options at this Critical Juncture– Exit– Harvest– Stay the Course– Measured Transformation– Radical Transformation

• Alltel Evaluated Each of these Alternatives

• We Have Selected Measured Transformation

4

Measured Transformation Positions Us to Become More Aggressive as Competition Emerges

• Expand service offerings

– Higher Speed Broadband Data

– Video Offering

– VoIP Services

• Combined with bundling to level the competitive playing field

– Price discounts

– Broadband data becomes the core component around which other products evolve

• Retention economics play a key role

– “New Way” of thinking

• Use Trials/Pilots before placing significant capex bets

– Specific milestones targeted

– Use learnings to modify original business plan assumptions

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Measured Transformation Components

• Satellite Agency Agreement• Integrated Media Portal (2Wire, etc.)• Fiber to the Remotes• Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

• Foundation building block• Unlimited Local• Features• 2H, 5H, or Unlimited LD

Voice Element

• Provisioning and Billing• Infrastructure Upgrades

OSS and NetworkEnablers

• IP Virtual Private Network• Outsourced Residential Services• Personal Communications and Unified Messaging

VoIP Services

• DSL Speed Improvements• WiMax to Fill Gaps• Portal Content

Broadband Data Element

• Bundles• Sales Training

Wireless Element

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Measured Transformation Components: Voice Element

• Satellite Agency Agreement• Integrated Media Portal (2Wire, etc.)• Fiber to the Remotes• Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

• Provisioning and Billing• Infrastructure Upgrades

OSS and NetworkEnablers

• IP Virtual Private Network• Outsourced Residential Services• Personal Communications and Unified Messaging

VoIP Services

• DSL Speed Improvements• WiMax to Fill Gaps• Portal Content

Broadband Data Element

• Bundles• Sales Training

Wireless Element•Foundation building block•Unlimited Local•Features•2H, 5H, or Unlimited LD

Voice Element

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Measured Transformation Components: Broadband Data Element

• Satellite Agency Agreement• Integrated Media Portal (2Wire, etc.)• Fiber to the Remotes• Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

• Foundation building block• Unlimited Local• Features• 2H, 5H, or Unlimited LD

Voice Element

• Provisioning and Billing• Infrastructure Upgrades

OSS and NetworkEnablers

• IP Virtual Private Network• Outsourced Residential Services• Personal Communications and Unified Messaging

VoIP Services

• Bundles• Sales Training

Wireless Element

•DSL Speed Improvements•WiMax to Fill Gaps•Portal Content

Broadband Data Element

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Measured Transformation Components : Video Element

• Foundation building block• Unlimited Local• Features• 2H, 5H, or Unlimited LD

Voice Element

• Provisioning and Billing• Infrastructure Upgrades

OSS and NetworkEnablers

• IP Virtual Private Network• Outsourced Residential Services• Personal Communications and Unified Messaging

VoIP Services

• DSL Speed Improvements• WiMax to Fill Gaps• Portal Content

Broadband Data Element

• Bundles• Sales Training

Wireless Element•Satellite Agency Agreement•Integrated Media Portal (2Wire, etc.)•Fiber to the Remotes•Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

9

Measured Transformation Components : VoIP Services

• Satellite Agency Agreement• Integrated Media Portal (2Wire, etc.)• Fiber to the Remotes• Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

• Foundation building block• Unlimited Local• Features• 2H, 5H, or Unlimited LD

Voice Element

• Provisioning and Billing• Infrastructure Upgrades

OSS and NetworkEnablers

• DSL Speed Improvements• WiMax to Fill Gaps• Portal Content

Broadband Data Element

• Bundles• Sales Training

Wireless Element•IP Virtual Private Network•Outsourced Residential Services•Personal Communications and Unified Messaging

VoIP Services

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Measured Transformation Components : Wireless Element

• Satellite Agency Agreement• Integrated Media Portal (2Wire, etc.)• Fiber to the Remotes• Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

• Foundation building block• Unlimited Local• Features• 2H, 5H, or Unlimited LD

Voice Element

• Provisioning and Billing• Infrastructure Upgrades

OSS and NetworkEnablers

• IP Virtual Private Network• Outsourced Residential Services• Personal Communications and Unified Messaging

VoIP Services

• DSL Speed Improvements• WiMax to Fill Gaps• Portal Content

Broadband Data Element

•Bundles•Sales Training

Wireless Element

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Measured Transformation Components : OSS and Network Enablers

• Satellite Agency Agreement• Integrated Media Portal (2Wire, etc.)• Fiber to the Remotes• Switched Digital Video via ADSL2+, VDSL, or FTTX

Video Element

• Foundation building block• Unlimited Local• Features• 2H, 5H, or Unlimited LD

Voice Element

• IP Virtual Private Network• Outsourced Residential Services• Personal Communications and Unified Messaging

VoIP Services

• DSL Speed Improvements• WiMax to Fill Gaps• Portal Content

Broadband Data Element

• Bundles• Sales Training

Wireless Element

•Provisioning and Billing•Infrastructure Upgrades

OSS and NetworkEnablers

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Outlook for the Future

• Measured Transformation

• Wireline is a Healthy Business

• Continuing to Invest